Ok, here’s the scenario – you’re a start-up CPG entrepreneur ready to launch in retail and you have a choice – you can either sell your product in a local 7-store chain or in a national chain of 100 stores. Which do you choose? Of course, like any good entrepreneur, your first answer should be “both” because entrepreneurs don’t have to accept the ground rules (as long as we aren’t breaking the law!). But if pressed to make a choice, I would opt to launch in the smaller chain.
Most start-up entrepreneurs don’t get the chance to develop a sales strategy. We crave sales so badly that we jump at barely rational opportunities in the hopes they will eventually make sense. But these early choices are crucial and can make the difference between success and failure.
While the ability to grow sales might not lend itself well to business textbooks, it’s a skill that needs to be developed. The foundation of an effective sales pitch is crafting a sales story that creates an irresistible sense of momentum and opportunity. And that brings me back to my opening question about where to launch, and why starting smaller is so important. Here are some things we know about first-time product launches:
- You need to leave room to iron out the wrinkles: Things won’t go exactly right, in fact many things won’t go right… it could be the taste, it could be the texture, it’s almost guaranteed the packaging won’t be perfect – (ever notice how new brands are always the hardest ones to open?) So, it’s best to make those early mistakes on a smaller scale.
- It helps to collaborate with your buyer: If you’ve laid the right groundwork, the grocery buyer at your first retailer should be as excited as you are to be the first store in the world, in the history of humanity(!), to offer your product. Given the stakes the launch holds for your future, you should try to get your grocery buyer fully invested in your success – so they can take credit for “discovering” the next big thing. Make sure your buyer has the chance to give input on packaging, varieties, flavor, even product names along the way. It’s now been more than 25 years since we launched Honest Tea in Whole Foods, but whenever I see my first buyer (who now works as a broker), we still give each other a big hug.
- You will learn a lot from the consumers: Now that we can get back into stores for consumer sampling events again, we have the chance to interact with shoppers face to face. And while online surveys and focus groups can be directional, the most effective way to learn from people is by engaging them in sampling and conversation. In the process of giving out hundreds of samples, you will learn the most effective phrasing to present your concept, listen to the questions they ask and let them look at your package, and hear which taste combinations interest them and which turn them off. Here are just a few insights I’ve gained while doing product demos:
- Though we initially described Honest Tea as “Freshly brewed, Barely Sweetened,” consumers would ask me how you sweeten a drink with “barley”? I would never have heard that question if I hadn’t been in the stores. We eventually switched to “Just a Tad Sweet,” which was much easier to understand.
- When we were launching the Beyond Burger at Beyond Meat, we heard lots of questions and concerns around whether GMOs were used, so we made a point of investing in the Non-GMO verified certification.
- At Eat the Change we hear people excited and intrigued about mushrooms, but unsure how mushrooms can be made into jerky and what the taste will be like compared to animal-based products. We make sure to provide lots of information on how we wood-smoke the mushrooms, and help our samplers communicate expectations around a softer, chewier savory snack.
The first launch is all about demonstrating proof of concept. Once you succeed on a small scale, you can take it up a notch and try to prove the concept on a larger stage. Here’s a summary of the steps we took to build Honest Tea. (You can read more about that adventure from our book, Mission in a Bottle.)
- June 1998 - Launched Honest Tea in the 17 Whole Foods stores in the Mid-Atlantic region.
- Used aggressive sampling and promotional support highlighting the less-sweet taste to become the top-selling bottled tea in those stores.
- Shared that success with other Whole Foods regions and other natural chains to become the fastest-growing bottled tea in the natural channel (as tracked by SPINS).
- Built on that success to become the top-selling bottled tea in the natural channel.
- Built on that success to launch into mainstream channels.
- Became the nation’s top-selling organic bottled tea.
When you put it down on paper, it seems straightforward. But of course, there were a lot of pain points and challenges along the way, not to mention lots of hard work, some great innovation and our evolution to Organic and Fair Trade certifications. Sales success is driven by creating a compelling sense of opportunity. The smaller you start, the easier it is to create a sense of momentum and growth.